The investigation focused on the bank's administrative management systems and risk management systems a ministry official said

The investigation focused on the bank's administrative management systems and risk management systems, a ministry official said. Officers from the Finance Ministry and the Bank of Japan searched the Tokyo and Osaka offices of Daiwa Bank following the loss of $1.1bn through fraudulent bond trading in New York. A Robson Rhodes team will be helping the investors to prepare their case before the liquidator, so that they may be admitted as creditors of the Knight Williams company that failed.. Using the law to force the SIB to take tougher action against Knight Williams, or disqualify their directors and staff from working in the financial industry again, was also not ruled out.Other possible moves, such as forcing the investment management regulator, Imro, to take disciplinary action against one of the Knight Williams web of companies which is still trading, will be examined.Neil Cooper, partner at chartered accountants Robson Rhodes, said his firm had also agreed to offer its services for free. The ICS has said it is unable to prioritise the Knight Williams investors over the heads of equally desperate claimants.Knight Williams & Co, which went into liquidation in July, claimed to be a retirement specialist. Its savers argue they were told their money would be safe, and that neither the risks of equity investments or the unusually high management charges on their funds were ever properly explained to them.Kenneth Jordan, one of the action group's founder members, said: "I am in my 70s.

Time is not on our side, members of our group are going down without getting any results from their claims for compensation."Mr Micklethwaite admitted that drawn-out legal action may not be the best option. His suggestion of a special levy for the investors came despite, as he acknowledged, the relative failure of similar efforts in the City, including the fund for Maxwell pensioners.Options under consideration by his firm include taking legal action against Knight Williams directors and others who contributed to the financial losses suffered by the savers. The demerger plans have yet to be formally approved by shareholders and by the boards of the companies. It is also unclear exactly what level of tax the Government will levy on the companies as a result of the sale.Comment, Page 25. NIC CICUTTI Lawyers acting for hundreds of savers who lost money through failed financial adviser Knight Williams yesterday said the financial services industry should set up a rescue fund for clients. Neil Micklethwaite, head of commercial litigation in the City law firm Dibb Lupton Broomhead, said every legal avenue would be explored to win justice for the savers.But he argued that time was - literally - running out for many of the mainly elderly savers involved in the Knight Williams Action Group.Mr Micklethwaite raised the possibility of the City's senior watchdog, the Securities and Investments Authority, or other sectors of the financial industry, setting up an independent fund to help the savers.The fund would be similar , he suggested, to that of the Investors Compensation Scheme, the industry's own lifebelt.

You would have thought that in mid-July this would not be too hard a job to do."The problem emerges at an embarrassing time for the Government, which has been locked in discussions with the electricity company over the planned flotation of the grid, at present owned by the 12 regional electricity companies in England and Wales.The companies reached agreement in principle last week that the grid - worth about pounds 3.5bn - should be demerged to shareholders in December and that a pounds 50 rebate should be paid to customers shortly afterwards. "It is the National Grid Company's job to assess demand in advance and to call up plants in order to meet that demand. But the act is that at the end of the day the grid did the job."He added: "We are charged with providing secure and economic supply but we cannot dictate - we cannot force the generators to generate."One industry source rejected the suggestion that the generators were at fault. The reserves are used quite often although not to this extent. The risks involved are quite literally catastrophic."The committee which oversees the electricity industry's trading pool is also believed to be investigating the circumstances surrounding the sudden shortfall on 19 July.The National Grid confirmed that, on what it described as an "unusual day" in July, it had to dig into its reserves to keep the nation's lights burning.A spokesman said: "There is no legal obligation on the grid to keep the lights on but we do it because we do the job professionally.

MARY FAGAN Industrial Correspondent The Labour Party has called for an independent investigation into a crisis in the power supply industry which forced the National Grid Company to dig deep into reserves to prevent power cuts.The NGC was forced to take emergency action at one point in July because not enough generating plants in the south east of England were available to meet demand.Brian Wilson, Labour's trade and industry spokesman, said: "This is a deeply alarming revelation which confirms our fears about what is going on in the electricity industry since it became based on commercial relationships."He added: "I am calling for a full independent inquiry into this event to ensure that this never happens again. Whereas the Dow Jones index has risen 65 per cent since July1990 and the FT100 44 per cent, with smaller but respectable rises on most other European bourses, the CAC 40 index is actually lower than it was at that time.Investors take the view that the most attractive state-owned companies- such as the petro-chemical giant ELF - have already been been privatised.Subsequent sell-offs have attracted diminishing numbers of takers- down from three million for ELF to 800,000 for the latest privatisation, that of the steel firm Usinor.Small investors in Eurotunnel have had their fingers badly burned and foreign investors sceptical about the ability of the new French government to maintain the link with the German mark are reluctant to buy into the French market.Investors calculate, too, that the government's need to raise cash may force it to offer better terms for later privatisations of less attractive companies.. So far only about 17 billion francs have been realized.The problem for the government is the continuing weakness of the French stock market. Yesterday Renault shares were trading at around 144 francs ( pounds 18.37) compared with the 165 francs at which the first tranche of shares were offered in the initial stage of privatisation in November 1994 which cut the state's holding to a little over 50 per cent.Prospects for the firm improved recently, and the share price rose, after Prime Minister Alain Juppe announced the continuation of a scheme to encourage owners of old vehicles to send them to breakers' yards and buy new cars.For technical reasons only one state-owned enterprise can be privatised before the end of the year and it is looking increasingly likely that the chief candidate for a sell-off could be the aluminium firm Pechiney rather than Renault.The government desperately needs the revenue from privatisation sales to cut the budget deficit and was hoping to raise between Fr40bn and Fr50bn (pounds 500m to pounds 637m) from sales this year.